These are the general ledger transactions posted by Ostendo for Purchasing.
Transaction | Debit | Credit |
Purchase Receipt | ||
Purchase Order Receipt | Inventory (Asset) | Purch Rec not Inv (Liability) |
Purchase Order Receipt | Non Stock Items (COS) | Purch Rec not Inv (Liability) |
Purchase Order Receipt | Catalogue Costs (COS) | Purch Rec not Inv (Liability) |
Landed Costs | ||
Freight Costs | Inventory (Asset) | Freight Inwards (COS) |
Customs Charges | Inventory (Asset) | Customs Charges (COS) |
Purchase Invoice | ||
Suppliers Invoice | Purch Rec not Inv (Liability) | Creditors (Liability) |
Freight Invoice | Freight Inwards (COS) | Creditors (Liability) |
Customs Invoice | Customs Charges (COS) | Creditors (Liability) |
Purchases Received not Invoiced
The Purchases Received not Invoiced account is for the value of purchase order lines receipted but not yet invoiced. Ostendo treats the receipting of inventory into stock as a separate transaction to the invoice, which is reflected in the financial transactions.
Freight Inwards and Landed Costs
If landed cost is not used freight is expensed into the Freight Inwards account in Cost of Sales from the suppliers invoice or the freight invoice. If landed cost is used the freight cost is included in the value of inventory being receipted which posts a credit into the Freight Inwards account in Cost of Sales. This is offset by the suppliers invoice or the freight invoice which posts a debit to the Freight Inwards account in Cost of Sales. A problem with using landed cost is that the cost of freight needs to be included at the time of receipt. Often the invoices for these costs have not been received, so an estimate of these costs will suffice as these are used only for inventory valuation purposes.
Purchase Receipt Variance
This only occurs if Standard Costing is used as the inventory valuation method. If the Purchase Receipt Cost varies from the Item Standard Cost the difference is posted to the Purchase Receipt Variance account in Cost of Sales. Inventory Value is updated at the Standard Cost.
Purchase Price Variance
If the Purchase Price on the Purchase Invoice varies from the Purchase Receipt Cost the difference is posted to the Purchase Price Variance. Inventory value is updated at the time of purchase receipt and cannot be retrospectively updated when a supplier invoice is entered.
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